"The report shows the BBC has made real progress in delivering value for licence fee payers: an excellent achievement of which the BBC can feel proud. Popular, long-running dramas like Eastenders sit at the heart of the BBC schedule, generating loyalty from audiences as well as an environment for new writing, acting and production talent to flourish. They cost viewers less than they did ten years ago, while audience approval is on the up.
"We accept the majority of the NAO's recommendations, with the exception of the suggestion that the BBC should set targets at programme level. We believe there is a risk that this could harm the BBC's ability to produce distinctive programming by acting as a disincentive to take creative risks and creating unnecessary bureaucracy."
Anthony Fry, BBC Trustee with lead responsibility for value for money, 22 March 2011
"The BBC is doing a good job of applying basic financial controls and achieving steady cost reduction across its portfolio of continuing dramas. However, it should take a more holistic approach and compare the cost of these programmes with audience levels and opinions, both targeted and achieved, as these are critical measures of broadcast performance, and a key guide to whether the continuing dramas are delivering value for money."

Amyas Morse, head of the National Audit Office, 22 March 2011

The BBC Trust today published an independent report commissioned from the National Audit Office on the BBC’s management of the costs of producing continuing drama.

In 2009-10 the BBC spent £102.5 million (down from £108.6 million in 2002-03) making six continuing dramas or soap operas.

The NAO has concluded that, although the absence of formal audience-related performance objectives for individual dramas meant the NAO was unable to say whether the BBC is delivering value for money, the BBC has taken important steps towards achieving this.

The six continuing dramas reviewed were Casualty, Doctors, Eastenders and Holby City (broadcast throughout the UK), River City (broadcast in Scotland) and Pobol y Cwm (produced by the BBC for broadcast in Wales on S4C).

The review found that production costs on these long running shows are tightly controlled, and that the average cost of producing an hour of continuing drama has fallen by 20 per cent in real terms over the last eight years, with the programmes being delivered on time and largely within budget.

The report recommends the BBC strengthen its approach to achieving value for money in continuing drama by being more systematic in comparing and challenging production costs and processes.

Key points from the report and the Trust’s response to them include:

The average cost per viewer hour across the six programmes has increased in real terms by 8.9 per cent over the last eight years as a result of falling viewer numbers. However, this decline in viewer numbers has masked reductions in total production costs, which have declined by 20 per cent over the same period. Audience approval has increased by an average of 6.5 per cent over the last four years.The Trust is pleased with the NAO’s finding that the BBC has reduced the cost of producing these dramas by 20 per cent in real terms while at the same time increasing audience approval.

All six programmes were found to have strong mechanisms for establishing a detailed budget and then monitoring and reporting expenditure against it, although the teams responsible for producing the continuing dramas do not use a consistent approach. Of the completed series examined by the NAO, 33 of the 46 were on, or under budget.The Trust welcomes the NAO’s statement that the BBC has a strong culture of monitoring performance and strong mechanisms in place to establish and manage performance budgets.

The BBC regularly reviews the performance of programmes by looking at the number of viewers and the level of audience approval but does not set formal objectives for what programmes are expected to deliver. By setting such objectives, the BBC would demonstrably link the resources committed and what it is trying to achieve.While some objectives – for example budgets – can be set at individual programme level, the Trust believes that it is not always appropriate for the BBC to set audience-focused objectives for individual programmes. The BBC currently sets these objectives at a channel or genre level; to set objectives at an individual programme level runs the risk of creating not only perverse or unintended consequences but also of unnecessary bureaucracy. The Trust remains committed to ensuring value for money from programmes and considers that a varied range of metrics by channel and genre is an essential tool to achieve this. However, the Trust will undertake some further work to understand how other creative organisations address the issues raised by this recommendation.